Nvidia Corp. has entered into a significant licensing agreement with artificial intelligence chip startup Groq Inc., reportedly valued at $20 billion. This deal will also see Nvidia hire key personnel from Groq, including its CEO Jonathan Ross and president Sunny Madra. The agreement enables Nvidia to utilize Groq’s inference technology without fully acquiring the company, a strategy often referred to as a reverse acquihire.
The transaction amount reflects a substantial premium of $13.1 billion over Groq's valuation as of September. The licensing arrangement includes access to Groq’s flagship product, the LPU inference chip, known for its energy efficiency, reportedly using ten times less power than traditional graphics cards. Groq's LPU features a deterministic design, enhancing precision in timing calculations and reducing processing delays commonly seen in nondeterministic chips.
Additionally, Groq's technology incorporates a high-performance memory system, with hundreds of megabytes of on-chip SRAM, which outperforms HBM memory used in graphics cards. The company also utilizes its proprietary RealScale interconnect to form inference clusters, addressing synchronization challenges in AI server coordination.